ANALYSIS: The CMU Promise’s costly legacy

By John Irwin

The CMU Promise was sold as a bargain for Central Michigan University students. But six years after its death, it has ended up costing each of today’s students thousands of dollars.

Here’s how The Promise worked: Students who entered as freshmen between fall 2005 and summer 2008 had their tuition frozen at the rate when they first entered the university. This allowed the university to crow about the Promise at the same time it raised – at times dramatically – tuition for new students.

It seemed to make sense. Except for one thing: The economics of tuition meant each succeeding class was bearing the financial burden of the class that came before. The result was that freshmen in 2008-2009 were paying for the frozen tuition rates of the three succeeding years, setting up a sticker shock that former President Michael Rao’s administration and the Board of Trustees felt could not be sustained as economic collapse loomed.

Enacted under Rao and spearheaded by current President George Ross, then the vice president of finance and administrative services, the surface-level appeal of the Promise masked what was really going on: an aggressive push for tuition dollars that resulted in double-digit rate increases for students.

A costly legacy

As the chart below illustrates, tuition costs skyrocketed during the CMU Promise’s short lifespan. In 2004-05, the year before the Promise was enacted, in-state undergraduate students paid about $193 per credit hour for their classes after adjusting for inflation, or about $2,900 for a 15-credit semester. By 2008-09, the first full year after the Promise’s death, each credit cost an in-state undergrad nearly $358, or almost $5,400 for 15 credits.

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(Click the chart to enlarge it.)

That means a fifth-year senior paid about $1,500 less for his final semester at CMU in 2008-09 than an incoming freshman did in her first that year.

That’s because tuition rates, after adjusting for inflation, rose at an average annual rate of 22 percent between 2004-05 and 2007-08, by far the most tuition jumped year-to-year over the last 21 years, thanks in large part to the Promise.

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(Click the chart to enlarge it.)

The good news for current students, of course, is that tuition rates are rising at the lowest annual pace since the 1990s. Tuition has risen at an annual rate of about 1.5 percent when adjusting for inflation since the Promise ended, comparable to the 0.9 percent annual rate increase between 1993-94 and 2000-01.

Ross frequently likes to say his administration has kept tuition increases as low as possible for students, and since being sworn in in March 2010, the numbers bear that out. Since 2010-11, tuition costs have risen for in-state undergrads by just 2 percent after adjusting for inflation, or $7.59 per credit after inflation.

An alternate universe

What would have happened, though, if the Promise, Ross’ brainchild as head of finances, had never been implemented?

It is impossible, of course, to say with certainty. But we do know that before the Promise was implemented, CMU increased its tuition rate at a pace in line with the national average.

The chart below shows that CMU’s tuition rate rose largely in line with the national average of four-year public colleges between 1993-94 and 2003-04, according to data adjusted for inflation compiled by the College Board. CMU’s rose at a 3.2 percent annual clip, compared to the national 3.7 percent rate.

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(Click the chart to enlarge it.)

Nearly every public university in the country, including CMU, has had to adjust to a drastic drop-off in state funding over the last 30 years, and particularly over the last 10. That’s reflected in the College Board data, which found that tuition rose by 4.2 percent per year from 2003-04 to 2013-14, up from the previous decade.

CMU, however, saw itself increasing tuition at an annual rate of 7.6 percent. Considering that’s almost double the national average, it would be tough to say with total honesty that CMU found itself raising tuition solely as a way to counter shrinking state funds. As established earlier, the Promise years are responsible for a disproportionate amount of that increase, as tuition has risen at an annual rate of under 2 percent since 2007-08.

Had CMU’s tuition rate risen at a 4.2 percent clip annually from 2003-04 onward, students would be paying about $302 per credit this year, well below the $385 they pay today.

That means if you’re taking 15 credits this semester, you’re paying an extra $1,239 to the university this semester in tuition than your double in a Promise-free alternate universe might be.


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